2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
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• Owned the vehicle and use the stan-<br />
dard mileage rate <strong>for</strong> the first year you<br />
placed the vehicle in service, or<br />
• Leased the vehicle and are using the<br />
standard mileage rate <strong>for</strong> the entire lease<br />
tion of income. You can also elect under<br />
section 179 to expense part of the cost of<br />
certain property you bought in <strong>2004</strong> <strong>for</strong> use<br />
in your business. See the <strong>Instructions</strong> <strong>for</strong><br />
<strong>Form</strong> 4562 to figure the amount to enter on<br />
line 13.<br />
and dependents, even if you do not itemize<br />
your deductions. See the instructions <strong>for</strong><br />
<strong>Form</strong> <strong>1040</strong>, line 31, <strong>for</strong> details.<br />
period (except the period, if any, be<strong>for</strong>e Line 15<br />
1998). When to attach <strong>Form</strong> 4562. You must Deduct premiums paid <strong>for</strong> business insur-<br />
If you deduct actual expenses:<br />
complete and attach <strong>Form</strong> 4562 only if: ance on line 15. Deduct on line 14 amounts<br />
• Include on line 9 the business portion • You are claiming depreciation on paid <strong>for</strong> employee accident and health inof<br />
expenses <strong>for</strong> gasoline, oil, repairs, insura<br />
reserve <strong>for</strong> self-insurance or premiums<br />
property placed in service during <strong>2004</strong>; surance. Do not deduct amounts credited to<br />
ance, tires, license plates, etc., and<br />
• You are claiming depreciation on<br />
• Show depreciation on line 13 and rent listed property (defined below), regardless paid <strong>for</strong> a policy that pays <strong>for</strong> your lost<br />
or lease payments on line 20a.<br />
of the date it was placed in service; or earnings due to sickness or disability. For<br />
• You are claiming a section 179 ex- details, see Pub. 535.<br />
If you take the standard mileage rate, pense deduction.<br />
multiply the number of business miles by<br />
37.5 cents. Add to this amount your park- If you acquired depreciable property <strong>for</strong><br />
ing fees and tolls, and enter the total on line the first time in <strong>2004</strong>, see Pub. 946. Lines 16a and 16b<br />
9. Do not deduct depreciation, rent or lease Interest allocation rules.<br />
Listed property generally includes, but<br />
The tax treatment<br />
payments, or your actual operating exis<br />
not limited to:<br />
of interest expense differs depending on its<br />
penses.<br />
type. For example, home mortgage interest<br />
• Passenger automobiles weighing<br />
For details, see Pub. 463. and investment interest are treated differ-<br />
6,000 pounds or less; ently. “Interest allocation” rules require<br />
In<strong>for</strong>mation on your vehicle. If you claim • Any other property used <strong>for</strong> transpor- you to allocate (classify) your interest exany<br />
car and truck expenses, you must proitself<br />
to personal use, such as motorcycles, the correct line of your return and receives<br />
tation if the nature of the property lends pense so it is deducted (or capitalized) on<br />
vide certain in<strong>for</strong>mation on the use of your<br />
vehicle by completing one of the following. pickup trucks, etc.;<br />
the right tax treatment. These rules could<br />
• Schedule C, Part IV, or Schedule • Any property used <strong>for</strong> entertainment affect how much interest you are allowed to<br />
C-EZ, Part III, if: (a) you are claiming the or recreational purposes (such as photo- deduct on Schedule C or C-EZ.<br />
standard mileage rate, you lease your vehi- graphic, phonographic, communication,<br />
cle, or your vehicle is fully depreciated, and and video recording equipment);<br />
Generally, you allocate interest expense<br />
(b) you are not required to file <strong>Form</strong> 4562<br />
by tracing how the proceeds of the loan<br />
• Cellular telephones or other similar<br />
<strong>for</strong> any other reason. If you used more than<br />
were used. See Pub. 535 <strong>for</strong> details.<br />
telecommunications equipment; and<br />
one vehicle during the year, attach your • Computers or peripheral equipment. If you paid interest on a debt secured by<br />
own schedule with the in<strong>for</strong>mation re-<br />
your main home and any of the proceeds<br />
quested in Schedule C, Part IV, or Schedule Exceptions. Listed property does not in- from that debt were used in connection<br />
C-EZ, Part III, <strong>for</strong> each additional vehicle. clude photographic, phonographic, com- with your trade or business, see Pub. 535 to<br />
• <strong>Form</strong> 4562, Part V, if you are claim- munication, or video equipment used figure the amount that is deductible on<br />
ing depreciation on your vehicle or you are exclusively in your trade or business or at Schedule C or C-EZ.<br />
required to file <strong>Form</strong> 4562 <strong>for</strong> any other your regular business establishment. It also<br />
reason (see the instructions <strong>for</strong> line 13). does not include any computer or periph-<br />
How to report. If you have a mortgage on<br />
eral equipment used exclusively at a reguthan<br />
your main home), enter on line 16a the<br />
real property used in your business (other<br />
lar business establishment and owned or<br />
leased by the person operating the estab- interest you paid <strong>for</strong> <strong>2004</strong> to banks or other<br />
Line 11<br />
lishment. For purposes of these exceptions, financial institutions <strong>for</strong> which you re-<br />
Enter the total cost of contract labor <strong>for</strong> the a portion of your home is treated as a regu- ceived a <strong>Form</strong> 1098 (or similar statement).<br />
tax year. Do not include contract labor dethe<br />
interest on line 16b.<br />
lar business establishment only if that por-<br />
If you did not receive a <strong>Form</strong> 1098, enter<br />
ducted elsewhere on your return such as tion meets the requirements under section<br />
contract labor that you included in Part III. 280A(c)(1) <strong>for</strong> deducting expenses <strong>for</strong> the<br />
Also, do not include salaries and wages business use of your home.<br />
If you paid more mortgage interest than<br />
paid to your employees, instead see line 26.<br />
is shown on <strong>Form</strong> 1098, see Pub. 535 to<br />
See the instructions <strong>for</strong> line 6 on page find out if you can deduct the additional<br />
C-3 if the business use percentage of any interest. If you can, include the amount on<br />
listed property decreased to 50% or less in line 16a. Attach a statement to your return<br />
Line 12<br />
<strong>2004</strong>. explaining the difference and enter “See<br />
Enter your deduction <strong>for</strong> depletion on this<br />
attached” in the margin next to line 16a.<br />
line. If you have timber depletion, attach<br />
If you and at least one other person<br />
<strong>Form</strong> T. See Pub. 535 <strong>for</strong> details. Line 14 (other than your spouse if you file a joint<br />
Deduct contributions to employee benefit return) were liable <strong>for</strong> and paid interest on<br />
programs that are not an incidental part of a the mortgage and the other person received<br />
Line 13<br />
pension or profit-sharing plan included on the <strong>Form</strong> 1098, include your share of the<br />
line 19. Examples are accident and health interest on line 16b. Attach a statement to<br />
Depreciation and section 179 expense plans, group-term life insurance, and dededuction.<br />
Depreciation is the annual de- pendent care assistance programs. If you of the person who received the <strong>Form</strong> 1098.<br />
your return showing the name and address<br />
duction allowed to recover the cost or other made contributions on your behalf as a In the margin next to line 16b, enter “See<br />
basis of business or investment property self-employed person to a dependent care attached.”<br />
having a useful life substantially beyond assistance program, complete <strong>Form</strong> 2441,<br />
the tax year. You can also depreciate im- Parts I and III, to figure your deductible<br />
If you paid interest in <strong>2004</strong> that applies<br />
provements made to leased business prop- contributions to that program.<br />
to future years, deduct only the part that<br />
erty. However, stock in trade, inventories,<br />
applies to <strong>2004</strong>.<br />
and land are not depreciable. Depreciation Do not include on line 14 any contribustarts<br />
when you first use the property in tions you made on your behalf as a self-emyour<br />
business or <strong>for</strong> the production of in- ployed person to an accident and health<br />
Line 17<br />
come. It ends when you take the property plan or <strong>for</strong> group-term life insurance. You<br />
out of service, deduct all your depreciable may be able to deduct on <strong>Form</strong> <strong>1040</strong>, line Include on this line fees <strong>for</strong> tax advice recost<br />
or other basis, or no longer use the 31, the amount you paid <strong>for</strong> health insur- lated to your business and <strong>for</strong> preparation<br />
property in your business or <strong>for</strong> the produc- ance on behalf of yourself, your spouse, of the tax <strong>for</strong>ms related to your business.<br />
C-4